Instant View: U.S. Treasury auction allays concern about selloff

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NEW YORK (Reuters) – U.S. Treasuries, the bedrock of the global financial system, were hit by fresh selling pressure earlier Wednesday, in a sign that investors were dumping their safest assets after the U.S. roiled markets by introducing sweeping trade tariffs.

MARKET REACTION:

TREASURIES: U.S. Treasury benchmark yields declined after a government auction of $39 billion 10-year notes on Wednesday, suggesting good demand. The auction came amid a bond market rout that was sparked by the tariffs and prompted forced selling and a dash for cash.

COMMENTS:

JAMIE COX MANAGING PARTNER, HARRIS FINANCIAL GROUP, RICHMOND VA

“This was an A+ auction today that should sideline the concerns of systemic risk in the system.”

JEFFREY PALMA, HEAD OF MULTI-ASSET SOLUTIONS AND MACRO RESEARCH, COHEN & STEERS, NEW YORK

“The 10-year Treasury auction went better than expected certainly against a backdrop where the bond market had been trading very weakly over the course of the last week. That strong result at least in the short run is a positive for sentiment. The longer-term questions still remain around the impact from tariffs and so forth on growth. But at least for the short run it’s a bit of welcome good news against what has been a tough backdrop.”

VAIL HARTMAN, ANALYST ON U.S. RATES STRATEGY TEAM, BMO CAPITAL MARKETS

“Today’s 10-year auction was very strong… Before the auction, 10-year notes were under pressure with yields just off the session peak of 4.51% and rates headed into 1pm EST roughly 17 bp higher on the day. Since the results, Treasuries have rallied in the follow-through.”

(This story has been refiled to add the missing word ‘selloff’ in the headline)

(Compiled by the Global Finance & Markets Breaking News team; Editing by Lananh Nguyen.)